Fiat Chrysler: hits record on M&A, spin-offs talk

Stock rises more than 5 pct, after touching all-time high of 12.84 euros; shares also fuelled by M&A talk and up 30 pct since reports of Chinese interest in co first emerged last week.REUTERS | August 25, 2017, 08:30 IST

Italian media say separation of Magneti Marelli, the biggest of the component units, could happen by end-2017.

Milan: Listed shares in Fiat Chrysler (FCA) touch record high on speculation carmaker could spin off its three components units and upscale brands Maserati and Alfa Romeo.

Stock rises more than 5 pct, after touching all-time high of 12.84 euros; shares also fuelled by M&A talk and up 30 pct since reports of Chinese interest in co first emerged last week.

CEO Sergio Marchionne said last month FCA would "purify" its portfolio as part of new strategy to be unveiled early 2018.

He said spin-off story at FCA "not over", that there were "no structural, industrial, or engineering restrictions" to a separation of Alfa/Maserati and alluded to potential split from parts businesses.

Brokers Jefferies and Morgan Stanley on Wednesday raised TPs on the stock, citing possible changes in group structure.

"FCA management has very clearly opened the door for potential separation of some of its businesses that could achieve enhanced valuation and focus of strategic purpose," MS says, adding it sees potential for Maserati/Alfa spin-off by end-2018

Prices of most SUVs were cut between Rs 1.1 lakh and Rs 3 lakh following the implementation of GST, which subsumed over a dozen central and state levies like excise duty, service tax, and VAT from July 1.